Which of the Following Individuals Is Most Likely to Be

question 79

Multiple Choice

Which of the following individuals is most likely to be audited?

• A)Lola has AGI of $35,000 from wages and uses the standard deduction.
• B)Marvella has a $145,000 net loss from her unincorporated business (a horse farm).She also received $950,000 salary as a CEO of a corporation.
• C)Melvin is retired and receives Social Security benefits.
• D)Jerry is a school teacher with two children earning $55,000 a year.He also receives $200 in interest income on a bank account.

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Definitions:

Lump Sum

A lump sum is a single payment of money, as opposed to a series of payments made over time.

Compounded Quarterly

The method of calculating interest where the accumulated interest is added to the principal amount after each quarter.

Future Value

The worth of a current asset on a certain future date, calculated by presuming a specific growth rate over a period.